Saturday, March 21, 2009

Tourism Bureaucracy

Our tourism and accommodation industry leaders are too quick to assume a 70's union style wage bargaining position and simply demand more funding for the tourism budget without qualification.

The tourism budget should not be immune from scrutiny. Our industry leaders should be joining us in demanding efficiencies and the reduction of wasteful spending within government funded tourism agencies before they whine for further corporate welfare.

In our predictions for 2009, we predicted that a review of services will identify duplication in services provided by Tourism NZ, Ministry of Foreign Affairs and Trade, and New Zealand Trade and Enterprise. We expected these entities to be tweaked and some services amalgamated.

We also suggested that Tourism NZ would need to qualify its expenditure line by line alongside other government entities. Individual marketing campaigns, staffing levels and overseas offices will need to demonstrate an acceptable ROI to the New Zealand taxpayer. We expected some reshuffling of roles and budget and also expected a nil or at best a token increase in the tourism budget.

Whaleoil has suggested that we Take the axe to the waste now! and has faithfully typed the following article from Matthew Hooton's NBR column that begins to uncover some of the institutionalised bureaucracy and waste within tourism.
Tourism New Zealand (TNZ) is the government agency that promotes New Zealand globally.

Compared with its competitors in Australia and elsewhere, it operates on a lean budget of just $69 million annually.

In the ten years since then Tourism Minister Lockwood Smith, TNZ chairman Peter Allport and chief executive George Hickton launched their "100% Pure" marketing strategy, annual tourist numbers have leapt 52% to 2.4 million, average length of stay is up 24% and earnings are now $5.9 billion, up a massive 53%.

Taxpayers might think that a junior Treasury analyst could work out that TNZ does a good job, and that a clerk at the Office of the Auditor General could check no one's hand was in the till, but you would be wrong.

In fact, TNZ is monitored and evaluated by its board, its auditors and minister; by the Treasury, the State Services Commission and the Auditor-General; by the ministries of Women's Affairs, Maori Development (TPK), Pacific Island Affairs and Ethnic Affairs; by a select committee of Parliament; and of course by the industry itself, including the Tourism Industry Association, the airlines, the Inbound Tour Operators Council, the Hospitality Association, the Motel Association, Regional Tourism Organisations and by dozens of tourism reporters and publications around the country.

This bureaucracy was not enough for Labour. In 2002, it set up a new Ministry of Tourism to advise the minister on "board appointments, roles and functions" and oversee TNZ's "overall contribution to the government's policy objectives." The ministry has 24 full-time staff and an annual budget of $7 million, more than 10% of all the money TNZ has to do the real work of getting tourists to New Zealand.

As a result, the levels of accountability from the person who places advertisements in the People's Daily now run through TNZ's Shanghai office, to the general manager consumer marketing, to the chief executive, to the board, and now to the ministry, and on to the minister, currently none other than the prime minister himself - all overseen by at least seven other government agencies. Everyone in this process, except perhaps the person who places the ads, earns over $100,000 a year.

Were the Ministry of Tourism simply abolished, and TNZ left to get on with the job, overseen by "just" seven other government agencies, the taxpayer would save $21 million over the next three years, and no one would notice any difference.

The Ministry of Tourism is far from being the worst case. Take the masakari to the corporate welfare programmes of the Ministry for Economic Development and NZ Trade and Enterprise; abolish the pointless Tertiary Education, Families and Electricity commissions; simplify the Emissions Trading Scheme so it won't cost tens of millions to administer; slash the "policy advice streams" of TPK, Youth Development, Women's Affairs and so forth, and you've saved a billion dollars before breakfast.

Not a single doctor, nurse, teacher, police officer, solider or overseas marketing clerk would be affected. There could even be money left over for pay rises.

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